Update: General Electric Earnings

Jul.18.14 | About: General Electric (GE)

Summary

Q2 2014 EPS reported of $0.39 per share is up 8% Y/Y.

Q2 earnings have confirmed my earlier opinion of the stock.

In addition, GE expects its Alstom acquisition to add $0.06 to $0.09 to EPS by 2016.

General Electric (NYSE:GE) reported earnings today that were roughly in line with EPS and revenue estimates. EPS came in at $0.39, which was in line with analyst estimates. Revenue came in at $36.2 billion, which was $110 million below estimates. Although it missed analyst estimates, GE reported revenues that were up about 3% from the year-ago period.

In its earnings press release, GE highlighted better margins in the first half of 2014, citing a 30 bps increase. In addition, total equipment and services backlog increased to a whopping $246 billion -- up $23 billion from the year ago period.

In my previous article about GE titled, "General Electric: Changing Its Massive Momentum", I showed that in many ways GE was still struggling to recover from the Great Recession. After this earnings report, I still believe the forward P/E for the stock is pricey and I don't see much upside in the near term. However, the rise in margins is a good sign and should be a key metric to watch for any investor interested in the company. Also, the Alstom (OTCPK:ALSMY) merger bears close scrutiny as large foreign mergers are often unpredictable. In addition, GE still appears to be a solid income investor pick. The stock is due for a dividend hike for the December period and I expect a rise of 9% to 13% to the quarterly payout.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.